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By Ma Mingjie, Research Office Director of Department of Techno-Economic Research, DRC

I. Enhancing the Capacity of China's Railway Equipment Manufacturing Industry

Since the reform and opening up, the innovation on China's railway equipment manufacturing industry can be divided into four stages.

1. First stage (from 1980s to 1990s): the manufacturing capacity of enterprises was enhanced through technology introduction

The manufacturing capacity is meant to transform technological achievements into mass production suited to design requirements, including the progressiveness of the equipment, the technical level, the adaptability and the workmanship of workers, the technological design and management ability, etc. The manufacturing capacity is the prerequisite for improving the technical competence of enterprises and can be enhanced immediately through technology introduction. During 1980s, a large-scale technology introduction was carried out for China's railway industry. However, due to China's then poor technological and industrial conditions (even bolts of the same quality as those of other countries could not be purchased) and its lower management ability, the re-innovation had not been realized successfully. Nonetheless, the import of technologies during this period had further interpreted key technologies for enterprises. A number of talented people cultivated at that time had played a critical role in the import of technologies in 2003. China has ever since gained more say in the negotiations for the import of technologies.

2. Second stage (from 1990s to the beginning of the 21st century): the capability of enterprises to absorb and integrate technologies was stepped up

During this period, by intensifying R&D, the Chinese enterprises substantially improved their ability to absorb and integrate technologies. The ability of the railway equipment manufacturers to integrate technologies is mainly manifested in three aspects. Firstly, the ability to master key technologies. Secondly, the ability to formulate norms and standards for the utilization of technologies. Thirdly, the ability to design the systems, namely, the ability to properly handle the relationships and functions between main engines and the components.

The long-term technical accumulation has brought forth a technological foundation and a contingent of trained personnel for business innovation. For example, CSR Sifang Locomotive & Rolling Stock Co. Ltd. has accumulated technologies for bogie designing and manufacturing. The Chinese locomotive manufacturing enterprises think that their own strengths are the basis for the success in technology introduction, digestion, absorption and re-innovation and that the rail speed acceleration conducted for 5 times before 2003 had played a positive role in improving their strength. Although only the technology for manufacturing passenger trains of 160 km/h or lower was achieved, the relatively complete equipment manufacturing system was formed, which laid a foundation for future technology digestion, absorption and re-innovation ("Made in China: The Only Way to Modernization of China's Railway Technology and Equipment", Integrative Transportation, August, 2007).

Despite the considerable amelioration of the absorption capacity of the enterprises during this period, their technical level remained low and a prodigious amount of key technologies had yet not been achieved. For example, since 1980s, CNR Changchun Railway Vehicle Co. Ltd. had imported quite a number of advanced technologies from Britain, South Korea and Canada for the making of passenger trains, but had not gained the key technology for the making of CRH Electric Multiple Unit of 200km/h. There was still some gap between China and the developed countries in terms of the safety and dependability of bogie, converting and traction techniques and braking system, thus making it difficult to further conduct the rail speed acceleration.

3. Third stage (from 2003 till now): digestion, absorption and re-innovation characterized by integration innovation

This period was mainly marked by the grasp of part of the core technologies by the enterprises. The re-innovation made by Chinese enterprises was manifested in two ways.

Firstly, the imported technologies were transformed to adapt to China's national conditions on the basis of digestion and absorption. For example, the designing of the Electric Multiple Unit was carried out jointly with the foreign partners at the very beginning of the technology introduction to suit the product better to China's national conditions. When importing the high-speed technology from Alsthom Transport, CNR Changchun Railway Vehicle Co. Ltd. (hereinafter referred to as “Changchun RV”) revamped the original wagon considerably.

Secondly, technologies were upgraded on the basis of the technology introduction. By high-speed train technology, the re-innovation was reflected by the technological upgrading of accelerating the speed from 200 km/h to 300～350 km/h in 2007. Before, transnational corporations possessing the high-speed technology of 300 km/h and above had been Alsthom Transport, Siemens, Bombardier and Kawasaki Heavy Industries Group. By innovation manner, unlike the foreign-dominated design when technologies were imported, the re-innovation featuring technological upgrading was mainly designed by Chinese enterprises, with foreign partners providing technical support. CSR Sifang Locomotive & Rolling Stock Co. Ltd. developed high-speed trains of 300～350 km/h and above and 16 electric multiple units, marking the moment when Chinese enterprises have gained the ability to independently design and manufacture high-speed trains of 300～350 km/h.

The above-mentioned technology introduction has set up 3 platforms for independent innovation to be conducted by Chinese enterprises in the future. The first is the manufacturing platform, namely, the self-sustaining standard system for high-speed trains suited to China's national conditions. By taking the import, digestion and absorption of 9 key technologies as the leading factor, the industrial chain of R & D, designing and manufacturing of high-speed trains can come into being under the system. The second is the platform of digestion and absorption, on which a complete set of China's own testing and accepting system can be set up, including the transformation of technical drawings and tooling of fabrication technologies. The third is the platform of re-innovation, on which products and technologies can be re-innovated.

In general, at present the Chinese enterprises have mastered the international advanced manufacturing technologies and have gained the integration ability.

Stages and Features of the Enhancement of the Capacity of China's Railway Equipment Manufacturing Industry

	First Stage	Second Stage	Third Stage	Fourth Stage
Technology Source	Technology introduction	Technology introduction	Technology introduction	Endogeny
Technical Competence	Manufacturing Capacity	Absorption Ability	Absorption Ability	Innovation Ability
Innovation Model	Block Innovation Simulating Innovation	Block Innovation Simulating Innovation	Open Innovation Simulating Innovation Integration Innovation	Open Innovation Original Innovation Integration Innovation
Knowledge transferred	Explicit Knowledge	Explicit Knowledge	Implicit Knowledge	Implicit Knowledge

4. Fourth stage (medium- and long-term objective): Chinese enterprises have gained the independent innovation ability to research and develop key technologies

Enhancing the production capacity and the absorption ability is far from bringing about the technology catching-up, which can eventually be realized by enhancing the innovation ability. Realizing the independent innovation by mastering all or major core technologies is the medium- and long-term objective for China's railway equipment manufacturing industry. The enterprises know much about it, thinking that the integration ability is not the ultimate goal of independent innovation and that the innovation input cannot be reduced just because the integration ability is achieved.

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